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Re: T/A and Recent US Market Action

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Hi Harley,

A rising wedge is a triangle pattern formed when an up-trendline
(drawn by connecting successive bottoms) intersects (or appears like
it will intersect) a trendline connecting successive tops and the
intersection point is higher than the triangle's midpoint.  Rising
wedges are traditionally interpreted as a "continuation pattern"
meaning that prices should continue higher at or just before the
trendlines meet.

You can see this using the DJIA chart at
http://coolhistory.com/ChipsCharts/Markets  - I've drawn the red
trendline connecting the tops and its easy to imagine the trendline
connecting the bottoms.

FWIW, Triangles and wedges are the most common charting patterns and
are _very_ easy to get wrong.  I _never_ trust them unless there is
confirming volume pattern (the volume within a triangle should be
falling as the triangle continues to form).  Thus, unless they supply
actual volume numbers, I never apply triangle analysis to indices.  On
other thing to keep in mind is that people often draw triangles with
2-point trendlines instead of the much more reliable 3-point trendlines.

Hope this helps,

---Harley Meyer <meyer@xxxxxxxxxxx> wrote:
> In the spirit of learning can some one send a .gif to show me what a
> rising wedge is. Maybe a couple of .gifs to show a couple of
examples. I
> have heard this mentioned occasionally and still don't what what it
> Same goes for some of the triangle analysis mentioned in the past.
> Harley
> Dr C. Roffey wrote:
> > Be Careful. The DJIA and the S&P are both at the top of rising wedge
> > patterns. If the S&P breaks below 950 ... watch out.
> > The UK FT 100 is in the process of forming a right shoulder for a
> > &
> > Shoulders top. The Nikkei is nearly finished its technical rally. It
> > may
> > try to test 17500 but the next major move is downside.
> > I am not a happy chappy with these markets.
> > Regards
> > Dr Clive Roffey

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